Canadian food manufacturer and grocer George Weston has booked a drop in fourth-quarter earnings, hurt by increased costs at its retail subsidiary Loblaw.
For the three months to the end of December, net income slid 1.8% to C$109m (US$110.2m). The company booked foreign currency translation losses of $18m during the quarter, in addition to $5m in restructuring charges. However, adjusted basic net earnings per share increased from C$0.92 to C$1.01.
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Operating profit in the period slid 4.1% to C$352m, while adjusted operating profit dropped 1.3% to C$373m.
At Loblaw, operating profit was down 2.7% to C$313m, while adjusted operating profit dropped 3.9% to C$317m, hurt by costs from some stores in Ontario conventional stores to “more cost effective and efficient operating terms”. Investments in Loblaw’s IT and supply chain, increases in promotional pricing programmes and start-up costs associated with the launch of Loblaw’s Joe Fresh brand in the US also hit profits.
Operating income for the Weston Foods division remained flat in the period, at C$57m.
Group sales climbed 3.5% in the quarter to reach C$7.64bn, while sales from the firm’s Loblaw division increased 3.6% to $7.4 bn. George Weston sales amounted to C$410m, a 6.2% increase on the prior-year period.
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By GlobalDataFor 2012, George Weston expects adjusted basic net earnings per common share to be lower year-over-year, due to the impact of investment in Loblaw’s IT, supply chain and “customer proposition”.
Click here for the full earnings statement from George Weston.
